CONTRIBUTORY PENSION PLAN FOR SALARIED EMPLOYEES OF MCMASTER UNIVERSITY INCLUDING MCMASTER DIVINITY COLLEGE 2000 (Amended and restated effective January 1, 2014) Registration Number: 1079920 CERTIFIED to be a true and complete copy of the text of the Contributory Pension Plan for Salaried Employees of McMaster University Including McMaster Divinity College (As Amended and Restated Effective January 1, 2014) c/s December 16, 2013 Date
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TABLE OF CONTENTS SECTION 1 - INTRODUCTION... 2 SECTION 2 - DEFINITIONS... 4 SECTION 3 - ELIGIBILITY... 13 SECTION 4 - RETIREMENT DATES... 15 SECTION 5 - AMOUNT OF PENSION... 19 SECTION 6 - FORM OF PAYMENT OF PENSION BENEFITS... 26 SECTION 7 - CONTRIBUTIONS... 30 SECTION 8 - ADDITIONAL SERVICE-TRANSFERS AND BUYBACKS... 35 SECTION 9 - TERMINATION OF EMPLOYMENT... 40 SECTION 10 - DEATH BENEFITS... 44 SECTION 11 - LEAVE OF ABSENCE AND DISABILITY... 46 SECTION 12 - GENERAL PROVISIONS... 49 SECTION 13 - ADMINISTRATION OF THE PLAN... 50 SECTION 14 - ADMINISTRATION OF THE FUND... 52 SECTION 15 - CHANGE OR DISCONTINUATION OF THE PLAN... 54 1
SECTION 1 - INTRODUCTION 1.01 The Original Plan The Prior Plan was established by the University on September 1, 1947. Members of the Prior Plan and the University contributed towards the purchase of guaranteed annuities provided through the Canadian Government Annuities Branch and the Manufacturers Life Insurance Company up until June 30, 1966. Effective July 1, 1966, the Prior Plan was revised and restated, with the most important change being that, instead of purchasing benefits under an insurance contract, benefits were to be funded through and provided from a trust fund or an investment contract issued by an insurance company. In connection with the changeover, arrangements were made for "cashing out" of benefits under the former contract with the funds being deposited in the fund under the Prior Plan for provision of benefits at retirement. Similar arrangements could not be made with the Canadian Government Annuities Branch contract and these benefits remain payable to members of the Prior Plan as a portion of their retirement benefit. Effective July 1, 1969, the Prior Plan was redesigned and restated as the Original Plan. The text of the Original Plan has been revised and restated from time to time by amendments approved by the Board of Governors. 1.02 Surplus Agreement According to the actuarial valuation report on the Original Plan prepared by the Actuary, as at July 1, 2000, the assets of the Original Plan exceed the going concern and solvency liabilities of the Original Plan by over $320 million. The University entered into the Surplus Agreement as of May 31, 2001 with the McMaster University Faculty Association, the McMaster University Staff Association, the McMaster Clinical Faculty Association, the McMaster University Retirees Association, the individuals comprising the Committee (as defined in the Surplus Agreement) and Koskie Minsky (on behalf of all persons entitled to benefits under the Plan at any time between July 1, 2000 and December 31, 2000, inclusive who retained Koskie Minsky to execute the Surplus Agreement on their behalf), which provided for the distribution of a portion of the surplus under the Original Plan to certain members, Former Members and other beneficiaries under the Original Plan and the University. 2
1.03 Establishment of the Plan Pursuant to the Surplus Agreement, the University agreed to adopt a new registered pension plan (the McMaster University Including McMaster Divinity College 2000 ), effective July 1, 2000, subject to receipt of applicable regulatory approvals, to receive a transfer of assets, including a portion of the surplus, and liabilities from the Original Plan in order to facilitate the distribution of surplus in accordance with the Surplus Agreement and such court orders and regulatory approvals as the University deemed necessary or desirable to permit such distribution of surplus. 1.04 Restatement of the Plan Effective July 1, 2008, the Plan was amended and restated to consolidate all amendments since the inception of the Plan and to make changes to the Plan to reflect administrative practice and otherwise of a housekeeping nature. Effective January 1, 2014, the Plan is again restated to consolidate all amendments since the last restatement of the Plan, and to make further changes to reflect administrative practices, legislative changes, and otherwise of a housekeeping nature. 3
SECTION 2 - DEFINITIONS 2.01 "Actuarial Equivalent" means a pension of an equal present value computed using actuarial tables and such other methods and assumptions adopted for the purposes of the Plan, subject to any requirements of the Pension Benefits Act and the Income Tax Act. 2.02 "Actuary" means a person or firm, who is, or one of whose Members is, a Fellow of the Canadian Institute of Actuaries, and who is appointed by the University for purposes of the Plan. 2.03 "Approval Date" means January 14, 2003, the date on which the Superintendent of Financial Services of Ontario (or any successor thereto) consented to the distribution of the Surplus in accordance with the Surplus Agreement. 2.04 "Average YMPE" is computed by summing the YMPE in effect in each of the months of the Member's Pensionable Service to a maximum of forty-eight (48) months and dividing the resulting number by the Member's number of months of Pensionable Service to a maximum of forty-eight (48) months. For this purpose, the YMPE in effect for each month in a Plan Year shall be the YMPE in effect on July 1 of such Plan Year. Where the Member's Pensionable Service exceeds forty-eight (48) months, the computation shall utilize the same months of Pensionable Service used for the calculation of the Best Average Salary. Notwithstanding the foregoing, for Members who are newly hired by the University on or after May 1, 2010 and in respect of service as a Unifor Local 5555 Member only, Average YMPE is computed by summing the YMPE in effect in each of the months of the Member s Pensionable Service to a maximum of sixty (60) months and dividing the resulting number by the Member s number of months of Pensionable Service to a maximum of sixty (60) months. For this purpose, the YMPE in effect for each month of a Plan Year shall be the YMPE in effect on July 1 of such Plan Year. Where the Member s Pensionable Service exceeds sixty (60) months, the computation shall utilize the same months of Pensionable Service used for the calculation of the Best Average Salary. 2.05 "Beneficiary" means a beneficiary designated by a Member in accordance with Section 10.06. 2.06 "Best Average Salary" is computed by summing the Regular Annual Salary in effect in each of the months of the Member's Pensionable Service to a maximum of forty-eight (48) months and dividing the resulting number by the Member's number of months of Pensionable Service to a maximum of forty-eight (48) months. Where the Member's Pensionable Service exceeds forty-eight (48) months, the computation shall utilize the months of Pensionable Service in which the Regular Annual Salary was the highest, which months need not be consecutive. 4
Notwithstanding the foregoing, for Members who are newly hired by the University on or after May 1, 2010 and in respect of service as a Unifor Local 5555 Member only, Best Average Salary is computed by summing the Regular Annual Salary in effect in each of the months of the Member s Pensionable Service to a maximum of sixty (60) months and dividing the resulting number by the Member s number of months of Pensionable Service to a maximum of sixty (60) months. Where the Member s Pensionable service exceeds sixty (60) months, the computation shall utilize the months of Pensionable Service in which the Regular Annual Salary was the highest, which months need not be consecutive. 2.07 "Commuted Value" means, in relation to benefits that a person has a current or future entitlement to receive, a lump sum amount which is the actuarial present value of those benefits, computed at the rate of interest and using the actuarial tables and such other methods and assumptions adopted for the purposes of the Plan, subject to any requirements of the Pension Benefits Act and the Income Tax Act. 2.08 "Consumer Price Index" means the seasonally adjusted Canada All-items Consumer Price Index as published by Statistics Canada under the authority of the Statistics Act (Canada). 2.09 "Continuous Service" means an Employee's uninterrupted period of employment with the University since his last date of hire by the University, including any period of lay-off and any other period of temporary suspension of active employment. 2.10 "Early Retirement Date" has the meaning set out in Section 4.03. 2.11 "Employee" means, an individual who, is employed by the University on a continuing full-time basis and who: (i) (ii) (iii) (iv) is represented by Unifor Local 5555, Unit 1 as the successor to the National Automobile Aerospace Transportation and General Workers Union of Canada, CAW - Canada and its Local Union No. 555, Unit 1 ( Unifor Local 5555 ); or is a member of the McMaster University Faculty Association ( MUFA ), and who is subject to the terms of any remuneration settlement between MUFA and the University; or is subject to the terms of any remuneration settlement between the Professional Librarian Group which is represented by MUFA and the University; or is a clinical faculty member of the Faculty of Health Sciences who must maintain membership in the Regional Medical Associates of Hamilton, and whose employment with the University began before July 1, 1991 or, whose employment with the University began on or after July 1, 1991 but who elected, or was deemed to have elected, to participate in the Plan prior to July 1, 1995; or 5
(v) (vi) (vii) is a member of The Management Group of the University and was hired or rehired as a TMG Employee before June 16, 2009; or is an SAAO Employee who was hired or rehired as an SAAO Employee before June 16, 2009; or is represented by The McMaster University Academic Librarians Association ( MUALA ) and was hired or rehired before March 16, 2010 and is a member of MUALA; is employed by any of the following entities on a continuing basis: (i) (ii) (iii) (iv) (v) (vi) McMaster Association of Part Time Students ( MAPS ) and was hired or re-hired as a MAPS employee before December 1, 2006; or McMaster Children s Centre Inc. and was hired or re-hired as a McMaster Children s Centre Inc. employee before December 1, 2006; or McMaster University Faculty Association and was hired or re-hired as a McMaster University Faculty Association employee before January 31, 2007; or Divinity College and was hired or re-hired as a Divinity College employee before January 31, 2007; or Regional Medical Associates of Hamilton ( RMA ) and was a nonunionized employee of the RMA hired or re-hired before January 31, 2007; or RMA and was a unionized employee of the RMA hired or re-hired before July 1, 2007; (c) (d) (e) (f) on July 1, 2013, is not employed in any of the capacities described in and above, but met the definition of Employee as it read on June 30, 2013; is employed on a continuing part-time basis in any of the capacities described in above on at least a half-time (1/2) basis as specified in the individual s letter of appointment; is employed in conformity with Section 2.11 or 2.11(d) for a specified period that is greater than one (1) year; is employed in any of the capacities described in, (c) or (d) above for a specified period that is greater than one (1) year; or for a specified period that is less than or equal to one (1) year and whose specified period of appointment is extended or renewed, such that the cumulative period of employment extends beyond one (1) year and provided that such extension or renewal begins within one (1) year from 6
the date the previous appointment ended and that the individual elects to join the Plan within three (3) months of the effective date of such extension renewal; or, (g) is employed on a continuing part-time basis in any of the capacities described in above and in each of two previous consecutive calendar years of employment has either earned at least 35% of the YMPE or has worked at least seven hundred (700) hours. 2.12 "Faculty Member" means a Member of the Plan who is a member of MUFA, and who is subject to the terms of any remuneration settlement between MUFA and the University, but does not include, for purposes of the Plan, a Member who: is a full-time clinical faculty member of the faculty of Health Sciences who must maintain membership in the Regional Medical Associates of Hamilton; or is a Librarian as defined under Section 2.18; or (c) is an SAAO Member as defined under Section 2.34. 2.13 "Financial Carrier" means the trust company or insurance company appointed from time to time to receive and to hold, administer and invest monies pursuant to the Plan. Subject to the terms of this Plan, the Financial Carrier shall operate according to a trust agreement or an insurance contract, whichever is appropriate, between itself and the University. 2.14 "Former Member" has the meaning ascribed in Section 9. 2.15 "Fund" means the funds, securities and other assets held by the Financial Carrier in respect of the Plan. 2.16 "Hourly Plan" means the Contributory Pension Plan for Hourly-Rated Employees of McMaster University Including McMaster Divinity College. 2.17 "Income Tax Act" means the Income Tax Act (Canada) and the Regulations thereunder, as amended or replaced from time to time. 2.18 "Librarian" means a Member of the Plan who is subject to the terms of any remuneration settlement between the Professional Librarian group and the University. 2.19 "Maximum Annual Salary" means, for a calendar year, the amount of salary which produces an annual pension amount under Section 5.01 which is equal to the maximum annual pension applicable for that calendar year under Section 5.06(i). For this purpose, the YMPE for the calendar year and one (1) year of Pensionable Service will be used for the calculation under Section 5.01. 2.20 "Member" means an Employee who is a contributing participant in the Plan except as provided in Section 11 (Leave of Absence and Disability). 7
2.21 "MUALA Member means a Member of the Plan who is represented by The McMaster University Academic Librarians Association. 2.22 "Net Interest on the Fund" means interest on required and voluntary contributions from the date the contribution is made by the Employee to the last day of the month in which payment is made or deemed to be made from the Fund. Such interest is credited at the end of each Plan Year and at termination based on the Average Annual Rate of Return determined by the following formula: Average Annual Rate of Return = (Sum of the Annual Rates of Return for each of the current and previous 4 Plan Years) 5 where, Annual Rate of Return = Net Income ½ (Market Value of Fund at beginning of Plan Year plus Market Value at end of Plan Year less Net Income) and, "Net Income" equals the sum of interest, dividends, net realized gains and net unrealized gains during the Plan Year less the sum of actuarial, investment, investment counsellor, trustee, audit and other administrative expenses applicable to the Plan or Fund. In respect of required contributions, such interest credited pursuant to this Section 2.22 shall be the greater of 0% and the Average Annual Rate of Return. 2.23 "Normal Retirement Date" has the meaning set out in Section 4.01. 2.24 "Original Plan" means the McMaster University Including McMaster Divinity College in effect after June 30, 1969, as amended and restated to July 1, 2008. 2.25 "Pension Benefits Act" means the Pension Benefits Act of Ontario and the Regulations thereunder, as amended or replaced from time to time. 2.26 "Pensionable Service" means, subject to Section 11 (Leave of Absence and Disability) and the Surplus Agreement, for full-time Employees engaged prior to July 1, 1966, the total of the years and partial years of Continuous Service; for full-time Employees engaged on or after July 1, 1966, except as to Members of the Regional Medical Associates, the total of the years and partial years of Continuous Service while a Member of the Plan from the date of joining the Plan; 8
(c) (d) (e) (f) (g) (h) (i) for full-time Employees who were Members of the Regional Medical Associates as of July 1, 1973, the total of the years and partial years of Continuous Service while a Member of the Regional Medical Associates; for full-time Employees who become Members of the Regional Medical Associates subsequent to July 1, 1973, the total of the years and partial years of Continuous Service while a Member of the Plan from the date of joining the Plan; for part-time Employees, that proportion of the total years and partial years of Continuous Service while a Member of the Plan after July 1, 1978 that is equal to the proportion that hours worked as a part-time Employee after July 1, 1978 bears to the full-time workload after July 1, 1978; for full-time Employees who become Members of the University's programmes entitled "Pre-Retirement Reduced Workload Policy" and the Faculty Reduced Workload Policy - Phase-in to Retirement subsequent to January 1, 1980, the period of Continuous Service while a Member of the Plan from the date of joining the Plan; for individuals who become Members by virtue of Section 2.11(g), that proportion of the total years and partial years of Continuous Service while a Member of the Plan that is equal to the proportion that hours required to be worked bears to the full-time workload in the same period; for a former Employee who is re-employed as an Employee by the University and who is entitled to receive benefits under the Plan and in respect of whom a payment pursuant to Section 9 has not been paid, the total of the individual's Pensionable Service under the Plan prior to the break in service, plus the period of the Employee s Continuous Service while a Member of the Plan after the date of reemployment by the University; and any Pensionable Past Service granted pursuant to Section 8.01 or any additional Pensionable Service granted pursuant to Section 8.04. For greater certainty, where assets and liabilities in respect of an individual were transferred from the Original Plan to the Plan pursuant to the Surplus Agreement or pursuant to the transfer effective July 1, 2003, the Pensionable Service of the individual for the purposes of the Plan shall include the total of the years of such individual's Pensionable Service as determined under the Original Plan. 2.27 "Pensioner" means a Member who has commenced monthly pension payments from the Fund in accordance with Section 5.13. 2.28 "Plan" means this " McMaster University Including McMaster Divinity College 2000", including any Appendices hereto, all as amended from time to time. 9
2.29 "Plan Year" means the twelve (12) month period beginning July 1st and ending the following June 30th. 2.30 "Postponed Retirement Date" has the meaning set out in Section 4.04. 2.31 "Prior Plan" means the Group Pension Plan of McMaster University and McMaster Divinity College, which provided for the accrual of benefits between September 1, 1947 and June 30, 1966, and the McMaster University, including McMaster Divinity College, which provided for the accrual of benefits between July 1, 1966 and June 30, 1969. 2.32 "Regular Annual Salary" means the Employee's regular rate of earnings effective at the beginning of each Plan Year, but with respect to a part-time Employee or an individual who becomes a Member by virtue of Section 2.11(g), the regular rate of earnings effective at the beginning of each Plan Year will be adjusted to the equivalent full-time salary rate. Regular Annual Salary: from July 1, 1973, shall exclude the following amounts in excess of the regular annual rate of earnings, (i) (ii) special supplementary stipends paid to the Chair, Associate Chair or Assistant Chair of an Academic Department, and such items as: other forms of special payment, living allowances, professional earnings, payments from research grants in aid, remuneration for extension teaching, payments for overtime and all other similar types of payment. from July 1, 1973, shall include, (i) (ii) professional earnings of the Regional Medical Associates up to the established ceiling for Members of that group, and Deans and other comparable administrative stipends. (c) (d) from July 1, 1992, shall exclude Deans' and other comparable administrative stipends. from January 1, 2007, shall exclude professional earnings of Regional Medical Associates. For a Member who was a participant in the University's programmes entitled Pre Retirement Reduced Workload Policy and the Faculty Reduced Workload Policy - Phasein to Retirement during any period of Plan participation, his Regular Annual Salary shall be that which is either agreed to between the Member and the University or is deemed to be his actual regular rate of earnings multiplied by a fraction, the numerator of which shall be the normal full-time hours of work for the Member and the denominator of which shall be 10
the Member's usual hours of work as a participant in the Pre-Retirement Reduced Workload Policy or the Faculty Reduced Workload Policy - Phase-in to Retirement programme. The deemed regular rate of earnings shall not exceed the compensation prescribed by the Income Tax Act. For an individual in receipt of income from the University sponsored Long Term Disability plan who was a Member immediately prior to becoming disabled, Regular Annual Salary shall be equal to the Regular Annual Salary in effect on the date immediately prior to the individual becoming disabled, increased each July 1 by the percentage increase calculated for pensions in pay in Section 5.08 (and, where applicable, Section 5.09), starting with the later of July 1, 1990 or the July 1 following commencement of receipt of income from the University sponsored Long Term Disability Plan. The increases to the Regular Annual Salary of a disabled individual as described in paragraph above shall not exceed the cumulative increase in the Consumer Price Index, in accordance with the requirements of the Income Tax Act. 2.33 "SAAO Employee" means an individual who qualifies as a Senior Academic/ Administrative Officer under the University s compensation arrangements and is employed by the University in any of the following capacities: President and Vice-Chancellor, Vice-President, or Associate/Assistant Vice-President (with staff appointment) For purposes of clarity, an SAAO Employee does not include: an Associate Vice-President (with academic appointment), or an individual employed the University in a position which uses any of the above titles but who does not qualify as a Senior Academic/Administrative Officer under the University s compensation arrangements. 2.34 "SAAO Member" means an SAAO Employee, provided the individual is a Member of the Plan prior to June 16, 2009. 2.35 "Special Retirement Date" has the meaning set out in Section 4.02. 2.36 "Spouse" means in relation to a Member, a person who, at the time a determination of spousal status is required, is legally married to the Member, provided that the Member is not living separate and apart from that person; or 11
not being legally married to the Member has cohabited with the Member in a conjugal relationship, (i) (ii) continuously throughout the immediately preceding one (1) year period; or in a relationship of some permanence, if they are the natural or adoptive parents of a child, both as defined in the Family Law Act, R.S.O. 1990. Notwithstanding the foregoing, a Member, for the purposes of this Plan, is considered to have only one Spouse on the date any benefit entitlement is determined. 2.37 "Surplus Agreement" means the agreement made as of May 31, 2001 among the University, the McMaster University Faculty Association, the McMaster University Staff Association, the McMaster Clinical Faculty Association, the McMaster University Retirees Association, the individuals comprising the Committee (as defined in the Surplus Agreement), Koskie Minsky (on behalf of all persons entitled to benefits under the Plan at any time between July 1, 2000 and December 31, 2000, inclusive who retained Koskie Minsky to execute the Surplus Agreement on their behalf) with respect to the distribution of a portion of the actuarial surplus under the Original Plan as at July 1, 2000, determined immediately prior to any transfer of assets or liabilities to the Plan. 2.38 "TMG Employee" means an individual who is employed by the University and is a member of The Management Group of the University. 2.39 "TMG Member" means a TMG Employee, provided the individual is a Member of the Plan prior to June 16, 2009. 2.40 "Unifor Local 5555 Member" means a Member of the Plan who is represented by Unifor Local 5555 as the successor to the National Automobile, Aerospace Transportation and General Workers Union of Canada, CAW - Canada and its Local Union No. 555, Unit 1. 2.41 "University" means McMaster University, including McMaster Divinity College, and such affiliated or associated corporations as may be designated by McMaster University from time to time. 2.42 "YMPE" means the Year's Maximum Pensionable Earnings as defined in the Canada Pension Plan. Unless the context requires otherwise, reference in this Plan to the masculine includes the feminine and vice versa, and a word importing the singular includes the plural and vice versa. Where any reference is made in the Plan to Section(s), it shall mean sections and subsections of the Plan unless specifically stated otherwise. 12
SECTION 3 - ELIGIBILITY 3.01 Participation in the Plan (c) (d) (e) (f) An individual may elect to join this Plan immediately upon becoming an Employee on or after the Approval Date. An individual who becomes an Employee by virtue of Section 2.11(f) on or after the Approval Date and who was not eligible to be a party to the Surplus Agreement may elect to join the Plan at the beginning of the contract which will extend the period of cumulative employment beyond one (1) year. If the election is made at that time, the individual may join the Plan with effect from the date of the first appointment provided that the Member agrees to make contributions in respect of past service with the University in accordance with the contribution formula described in Section 7.01. The individual shall join the Plan no later than the first day of the Plan Year which follows the date on which cumulative employment exceeds one (1) year. An individual who is an Employee by virtue of Section 2.11, (d), or (e) and is not otherwise a Member or a member of the Original Plan on the Approval Date, shall join the Plan no later than the first day of the Plan Year following the completion of a six (6) month period as an Employee. Each individual who is an Employee by virtue of Section 2.11(g) and who is not otherwise a Member or a member of the Original Plan on the Approval Date may elect, in the form and manner prescribed by the Administrator, to join the Plan with effect from the date of election. Where assets and liabilities were transferred from the Original Plan to the Plan in accordance with the Surplus Agreement in respect of an individual who was a member of the Original Plan at any time during the period July 1, 2000 to December 31, 2000 inclusive, such individual shall become a Member effective on the later of July 1, 2000 and the date he became a member of the Original Plan. Where assets and liabilities were transferred from the Original Plan to the Plan in respect of an individual who became a member of the Original Plan on or after January 1, 2001 and prior to the Approval Date who was an Employee on the Approval Date, such individual shall become a Member effective on the later of January 1, 2001 and the date he became a member of the Original Plan. 13
3.02 Enrolment Each Employee who becomes a Member otherwise than pursuant to Section 3.01(e) or (f) shall complete and sign an application or enrolment document in the form and manner prescribed by the Administrator. 3.03 Non-Participation Subject to Section 3.0l, (e) and (f) and Section 8 and the Surplus Agreement, no Employee may elect to or shall otherwise participate in the Plan for a period of service prior to the date of joining the Plan or a period of service during which such Employee is a member of the Original Plan (as determined thereunder). 3.04 Continued Participation Each other Employee (who is an Employee by virtue of Sections 2.11 to 2.11(f)) who becomes a Member shall remain a Member of the Plan as long as the individual is employed by the University and meets one of the criteria specified in the definition of Employee with the following exception. Each individual who is an Employee by virtue of Section 2.11(g) and who has elected to join the Plan as per Section 3.0l(d) may remain a Member of the Plan as long as the individual is employed by the University, even if the individual subsequently earns less than 35% of the YMPE or works less than seven hundred (700) hours in a calendar year. 3.05 Re-Employment of Pensioners If a Pensioner is re-hired by the University and meets one of the criteria specified in the definition of Employee before the first day of December of the year he attains age seventy-one (71), the Pensioner may elect either: to join the Plan immediately upon rehire, in which case: (i) (ii) (iii) his pension ceases immediately; the amount of accrued pension in respect of his prior period of Pensionable Service will recommence on his subsequent termination of Pensionable Service, subject to an actuarial increase, or, in the case of death, the usual survivor benefit is payable; and any benefit earned after the date of re-employment is calculated based on Pensionable Service after that date and is paid in addition to the payment in (ii) above, or to continue to receive his pension and not accrue further benefits during any period of re-employment. 14
SECTION 4 - RETIREMENT DATES 4.01 Normal Retirement Date Normal Retirement Date is the first day of the month coincident with, or next following, the date on which the Member attains age sixty-five (65). 4.02 Special Retirement Date Class A SAAO Members and TMG Members who are Employees on June 30, 2006 and who retire on or after July 1, 2006 MUALA Members who are Employees on March 15, 2010 and who retire on or after March 16, 2010 Special Retirement Date Special Retirement Date is the first day of any month coincident with or following the date the sum of the Member s age and years of participation in the Plan equals at least the following, for retirements during the following corresponding periods: For Retirement Dates from Age + Plan Participation Equals At Least July 1, 2006 to December 31, 2011 80 January 1, 2012 to December 31, 2012 81 January 1, 2013 to December 31, 2013 82 January 1, 2014 to December 31, 2014 83 January 1, 2015 to December 31, 2015 84 January 1, 2016 forward 85 Special Retirement Date is the first day of any month coincident with or following the date the sum of the Member s age and years of participation in the Plan equals at least the following, for retirements during the following corresponding periods: For Retirement Dates From Age + Plan Participation Equals At Least April 1, 2010 to December 31, 2011 80 January 1, 2012 to December 31, 2012 81 January 1, 2013 to December 31, 2013 82 January 1, 2014 to December 31, 2014 83 January 1, 2015 to December 31, 2015 84 January 1, 2016 forward 85 15
Faculty Members who are Employees on June 30, 2006 and who retire on or after July 1, 2006 Librarians who are Employees on June 15, 2006 and who retire after June 16, 2006 Special Retirement Date is the first day of any month coincident with or following the date the sum of the Member s age and years of participation in the Plan equals at least the following, for retirements during the following corresponding periods: For Retirement Dates From July 1, 2006 to December 31, 2011 80 January 1, 2012 to December 31, 2012 81 January 1, 2013 to December 31, 2013 82 January 1, 2014 to December 31, 2014 83 January 1, 2015 to December 31, 2015 84 January 1, 2016 to December 31, 2018 85 January 1, 2019 to December 31, 2019 86 January 1, 2020 to December 31, 2020 87 January 1, 2021 to December 31, 2021 88 January 1, 2022 to December 31, 2022 89 January 1, 2023 forward 90 Age + Plan Participation Equals At Least Class B SAAO and TMG Members who become Employees on or after July 1, 2006 Faculty Members who become Employees on or after July 1, 2006 Librarians who become Employees on or after June 16, 2006 Special Retirement Date Special Retirement Date is the first day of any month coincident with or following the date the sum of the Member s age and years of participation in the Plan equals at least 85 (eighty-five). Special Retirement Date is the first day of any month coincident with or following the date the sum of the Member s age and years of participation in the Plan equals at least the following, for retirements during the following corresponding periods: For Retirement Dates From July 1, 2006 to December 31, 2018 85 January 1, 2019 to December 31, 2019 86 January 1, 2020 to December 31, 2020 87 January 1, 2021 to December 31, 2021 88 January 1, 2022 to December 31, 2022 89 January 1, 2023 forward 90 Age + Plan Participation Equals At Least 16
Class C Members who are employees of: McMaster Association of Part Time Students McMaster Children s Centre Inc. McMaster University Faculty Association Divinity College Members who are non-union employees of Regional Medical Associates of Hamilton Special Retirement Date Special Retirement Date is the first day of any month coincident with or following the date the sum of the Member s age and years of participation in the Plan equals at least the following, for retirements during the following corresponding periods: For Retirement Dates From July 1, 2006 to December 31, 2011 80 January 1, 2012 to December 31, 2012 81 January 1, 2013 to December 31, 2013 82 January 1, 2014 to December 31, 2014 83 January 1, 2015 to December 31, 2015 84 January 1, 2016 forward 85 Age + Plan Participation Equals At Least Class D Unifor Local 5555 Members Members who are union employees of Regional Medical Associates of Hamilton Special Retirement Date Special Retirement Date is the first day of any month coincident with or following the date the sum of the Member s age and years of participation in the Plan equals at least 80 (eighty). Notwithstanding the foregoing, for Members who are newly hired by the University on or after May 1, 2010 and in respect of service as a Unifor Local 5555 Member only, the Special Retirement Date is the first day of any month coincident with or following the date on which the Member, has (1) attained age 60, and (2) the sum of the Member s age and years and participation in the Plan equals at least 80 (eighty). Class E Full-time clinical faculty members of the Faculty of Health Sciences who must maintain membership in the Regional Medical Associates of Hamilton Special Retirement Date Special Retirement Date is the first day of any month coincident with or following the date the sum of the Member s age and years of participation in the Plan equals at least 80 (eighty). Class F Other Members (not included above) who are Employees on June 30, 2007 and who retire on or after July 1, 2007 Special Retirement Date Special Retirement Date is the first day of any month coincident with or following the date the sum of the Member s age and years of participation in the Plan equals at least the following, for retirements during the following corresponding periods: 17
For Retirement Dates From July 1, 2006 to December 31, 2011 80 January 1, 2012 to December 31, 2012 81 January 1, 2013 to December 31, 2013 82 January 1, 2014 to December 31, 2014 83 January 1, 2015 to December 31, 2015 84 January 1, 2016 forward 85 Age + Plan Participation Equals At Least Class G Other Members (not included above) who become Employees on or after July 1, 2007 Special Retirement Date Special Retirement Date is the first day of any month coincident with or following the date the sum of the Member s age and years of participation in the Plan equals at least 85 (eighty-five). 4.03 Early Retirement Date Early Retirement Date is the first day of any month during the ten (10) year period preceding the Normal Retirement Date. 4.04 Postponed Retirement Date A Member who continues employment with the University beyond the Member's Normal Retirement Date shall be considered to have retired on the Member's Postponed Retirement Date as defined below. During the period of postponement, the Member shall continue to contribute and pension benefits shall continue to accrue under the Plan until the Member's Postponed Retirement Date. Postponed Retirement Date, for purposes of the Plan, is the earlier of: the first day of the month following the date the Member terminates employment with the University; and with effect from January I, 2007, the first day of December of the year the Member attains age seventy-one (71) or such other date as may be prescribed for this purpose by the Income Tax Act. A Member whose Postponed Retirement Date is that described in above shall cease to contribute and to earn pension benefits under the Plan and monthly pension payments shall commence as of that date, notwithstanding that the Member continues to earn employment income from the University beyond his Postponed Retirement Date. 18
SECTION 5 - AMOUNT OF PENSION 5.01 Normal, Special and Postponed Retirement Benefit The amount of annual pension payable to a Member from the Normal Retirement Date, Special Retirement Date or Postponed Retirement Date shall be the sum of: 1.4% of his Best Average Salary up to the Average YMPE, multiplied by Pensionable Service; plus 2.0% of his Best Average Salary in excess of the Average YMPE multiplied by Pensionable Service. The amount calculated above shall include any pension previously purchased from the Canadian Government Annuities Branch in accordance with the Prior Plan. Notwithstanding the foregoing, the amount of annual pension payable to a Member who is newly hired by the University on or after May 1, 2010 and in respect of service as a Unifor Local 5555 Member only, from the Normal Retirement Date, Special Retirement Date or Postponed Retirement Date shall be the sum of: 1.0% of his Best Average Salary up to the Average YMPE, multiplied by Pensionable Service; plus 1.6% of his Best Average Salary in excess of the Average YMPE multiplied by Pensionable Service. 5.02 Minimum Retirement Benefit In no case will a Member's total annual pension payable from this Plan on normal or postponed retirement be less than the annual pension payable from the Prior Plan plus 40% of total required contributions made after June 30, 1969. 5.03 Early Retirement Benefit Each Member who elects to retire on his Early Retirement Date may commence to receive a monthly pension benefit on the first day of any month after the month up to and including the Member's Normal Retirement Date, in an amount equal to the amount determined under Section 5.01, less 0.5% of the benefit determined under Section 5.01 for each month that the pension commencement date precedes the Normal Retirement Date. 19
(c) The early retirement benefit shall not be less than the Actuarial Equivalent of the deferred pension that would be payable at the Normal Retirement Date except in such instances and to such extent that further reduction is required under Regulation 8503(3)(c) of the Income Tax Act. A Member to whom Section 5.03 applies cannot elect to commence receiving a monthly pension benefit prior to the date the application is received by the Administrator. 5.04 Excess Employee Contributions A Member who has elected to receive a pension upon retirement from Continuous Service shall receive a lump sum cash payment of that amount of the Member's required contributions accumulated with Net Interest on the Fund which exceeds 50% of the Commuted Value of any pension entitlement of the Member under the Plan. Alternatively, such a Member may elect to transfer the excess in respect of Pensionable Service prior to January 1, 1991 to such other pension plan or retirement savings arrangement that may permit such transfers to be made, provided the transfer is made in the form and manner prescribed under the Pension Benefits Act and the Income Tax Act, and the excess in respect of Pensionable Service on and after January 1, 1991 shall be paid to the Member in a lump sum cash payment. 5.05 Benefit From Additional Voluntary Contributions In addition to any other retirement benefits payable under this Section 5, a Member is entitled to receive either: a refund of his additional voluntary contributions, if any, accumulated with Net Interest on the Fund; or an annuity purchased from a provider licensed to transact business in Canada with the amount described in above. 5.06 Maximum Benefits Maximum Annual Pension Notwithstanding any other provision of this Plan to the contrary, the maximum annual pension payable to a Member under this Plan determined at the time of pension commencement, in the form of pension to be paid to the Member, including any portion of the Member's pension payable to a Member's Spouse or former Spouse as a result of the breakdown of spousal relationship, shall not 20
exceed the years of Pensionable Service of the Member multiplied by the lesser of: (i) (ii) $2,696.67 for the year 2013 or such greater amount prescribed for this purpose by the Income Tax Act; and 2% of the average of the Member's best three consecutive years' Regular Annual Salary, reduced, if the pension commencement date precedes the earliest of the days on which: (A) (B) (C) the Member will attain age sixty (60); or the Member's age plus Pensionable Service would have equalled eighty (80); or the Member would have completed thirty (30) years of Pensionable Service, by 1/4% for each month by which the pension commencement date precedes that day, provided that no reduction applies in the case of a pension payable as a result of total and permanent disability. This Section 5.06 does not apply to additional benefits payable as a result of any Actuarial Equivalent increase owing to deferral of pension commencement after age sixty-five (65) nor does it apply to that portion, if any, of the pension derived from a Member's excess contributions or additional voluntary contributions. For purposes of this Section 5.06 a Member's Pensionable Service before January 1, 1992 is limited to thirty-five (35) years. Post-1991 Service Combined Bridge and Pension Maximum Benefit The annual benefits payable under Section 5.10, in combination with the annual lifetime pension payable under Section 5.01, 5.02 or 5.03, all provided in respect of periods after December 31, 1991, shall not exceed (i) plus (ii) as follows: (i) (ii) $2,696.67 for the year 2013 or such greater amount as may be prescribed for this purpose by the Income Tax Act, multiplied by the Pensionable Service of the Member after December 31, 1991; plus 1/35th of 25% of the average of the YMPE for the year of retirement and each of the two (2) immediately preceding years, multiplied by the Pensionable Service of the Member after December 31, 1991, not exceeding thirty-five (35) years. 21
(c) Maximum Bridge Benefit The annual bridge benefit payable under Section 5.10 shall not exceed the sum of the maximum benefits payable to the Member under the Canada Pension Plan and the maximum Old Age Security benefit payable to individuals aged sixty-five (65) as at the Member's pension commencement date, reduced proportionately in the case of a Member who has completed less than ten (10) years of Pensionable Service as at that date. The maximum bridge benefit so determined shall be further reduced by 1/4 of 1% for each month by which the Member s pension commencement date precedes his attainment of age sixty (60). 5.07 Pension Adjustment In no event shall the benefit accrued in a calendar year by a Member under Section 5.01, plus the additional voluntary contributions made that year under Section 7.01, result in a pension adjustment for the Member as defined by the Income Tax Act in excess of the limits for the year prescribed by the Income Tax Act. 5.08 Annual Pension Increase On January 1 of each year, pensions in pay from the Plan are increased utilizing the pensioner reserve method as described below: The percentage of increase shall be the lesser of: (i) the percentage by which the Average Annual Rate of Return determined by the following formula exceeds 4.5%, Average Annual Rate of Return = (Sum of the Annual Rates of Return for each of the previous 5 Plan Years) 5 where, Annual Rate of Return = Net Income ½ (Market Value of Fund at beginning of Plan Year plus Market Value at end of Plan Year less Net Income) and, "Net Income" equals the sum of interest, dividends, net realized gains and net unrealized gains during the Plan Year less the sum of actuarial, investment, investment counsellor, trustee, audit and other administrative expenses applicable to the Plan or Fund. 22
(ii) the percentage annual increase in the average Consumer Price Index during the twelve (12) month period that ended on the immediately preceding June 30. Notwithstanding the foregoing, for Members who are newly hired by the University on or after May 1, 2010 and in respect of service as a Unifor Local 5555 Member only, the pensioner reserve method utilized shall be as described below: The percentage of increase shall be the lesser of: (i) the percentage by which the Average Annual Rate of Return determined by the following formula exceeds 5%, Average Annual Rate of Return = (Sum of the Annual Rates of Return for each of the previous 5 Plan Years) 5 where, and, Annual Rate of Return = Net Income ½ (Market Value of Fund at beginning of Plan Year plus Market Value at end of Plan Year less Net Income) Net Income equals the sum of interest, dividends, net realized gains and net unrealized gains during the Plan Year less the sum of actuarial, investment, investment counsellor, trustee, audit and other administrative expenses applicable to the Plan or Fund. (ii) the percentage annual increase in the average Consumer Price Index during the twelve (12) month period that ended on the immediately preceding June 30. (c) Pensions in pay on January 1 of each year shall be increased by the percentage determined in Section 5.08 multiplied by a fraction, the numerator of which is the number of months (maximum twelve (12)) the pension was in pay during the previous Plan Year and the denominator of which is twelve (12). Notwithstanding the provisions of Sections 5.08 and 5.08, the increase to pensions in pay effective January 1, 2003 will be calculated using the same method but using 50% of the percentage determined in Section 5.08(i) and using the percentage increase in the average Consumer Price Index between the periods: 23
(i) January 1, 2001 to December 31, 2001, and (ii) July 1, 2001 to June 30, 2002. 5.09 Supplementary Pension Increase If in any year after 1996 the percentage calculated in Section 5.08(i) (the "Excess Interest Formula") exceeds the percentage calculated in Section 5.08(ii) (the "CPI Formula"), such excess will be used to provide a supplementary increase to the annual amount of those pensions in pay from the Plan which had their annual pension increase (as calculated in Section 5.08) in any of the three (3) previous years based on the Excess Interest Formula. The supplementary increase will be applied after the annual pension increase as provided in Section 5.08. The supplementary increase shall be the lesser of: (i) (ii) the percentage increase described in Section 5.09 by dividing (1 + the Excess Interest Formula) by (1 + the CPI Formula); and the increase necessary to produce an annual pension that would result from granting increases based on the CPI Formula in each of the three (3) previous years (starting with the year three (3) years previous) in which a lower increase (including any previous supplementary increases) has been provided. 5.10 Early Retirement Bridge Benefit A Member who retires pursuant to Section 4.02 on or after July 1, 1997, shall receive an additional benefit, payable monthly commencing on the later of: the Member's pension commencement date; and the first day of the month coincident with or next following the date on which the Member attains age sixty (60), and ending with the final payment on the earlier of: the first day of the month of the Member's death; and the first day of the month in which the Member attains age sixty-five (65), in an amount equal to $19 per month for each year of Pensionable Service rendered by the Member prior to June 30, 1996, to a-maximum of twenty (20) years of such service. 24
5.11 Transfer of Refund to Registered Retirement Savings Arrangement A Member who is entitled to receive a refund of contributions under the Plan, including a refund of excess Employee contributions pursuant to Section 5.04, may elect to have the amount transferred directly on his behalf to such other pension plan or retirement savings arrangement that may permit such transfers to be made, provided the transfer is made in accordance with the Pension Benefits Act and the Income Tax Act, and provided the Member elects to transfer his pension entitlement under the Plan. It is further provided that the aggregate amounts transferred under the Plan shall not exceed the maximum transfer amount prescribed under the Income Tax Act; the excess over the prescribed maximum transfer amount shall be payable in cash. However, this maximum transfer limit shall not apply to refund of contributions in respect of Pensionable Service accrued prior to 1991. 5.12 Alternative Benefits A Member who is eligible for pension benefits in accordance with the terms of this Section 5 may, in lieu thereof, elect to receive his pension benefits in accordance with the terms of Section 9. 5.13 Commencement and Duration of Pensions Except as otherwise provided in the Plan, the payment of pension benefits to a Member shall commence on the applicable commencement date specified in the Plan and shall be payable on the first day of each month thereafter during the remaining lifetime of the Member, with the last payment to the Member being made on the first day of the month in which the Member dies, subject to the terms of the normal form or any optional form of pension applicable to the Member pursuant to Section 6. 25